Question

which of the following retirement plans places a maximum amount that an individual can contribute to the fund in a given year at $5,000?
a. 401(k)
b. tax-deferred annuity
c. pension
d. iraplease select the best answer from the choices provided
a
b
c
d

Explanation:

• 401(k) plans have much higher annual contribution limits (far exceeding $5,000, with 2024 limits at $23,000 plus catch-up contributions for those 50+).
• Tax-deferred annuities typically have no legal annual contribution limits set by the IRS, though providers may impose their own.
• Pensions are employer-funded, with employees usually not making direct contributions capped at $5,000.
• Traditional and Roth IRAs have an IRS-set annual contribution limit that has historically been $5,000 (and adjusted for inflation over time, matching the specified cap here).

Answer:

d. IRA